Mitterand Seeks Cut In Interest On Loans To Developing Countries

ROME – French President Francois Mitterand called Thursday for the World’s major lending countries to cut interest rates on loans made to developing nations and to reschedule debt payments in order to prevent international economic collapse.

Mitterand, speaking at the Rome-based UN Food and Agricultural Organization (FAO), urged an international effort to correct the “economic imbalance” between rich and poor nations which, he said, was posing a global economic threat.

“We do not have the right to leave the poor countries without hope,” Mitterand told delegates from the 156 member nations of FAO.

“If they sink, we will sink with them,” he said.

Mitterand attacked the institutions that provide foreign loans, describing the interest rates they charge as “still far too high.”

He urged international lenders to reschedule debts “so that millions of people are not furiously forced to work only to nourish the interest payments of debts.”

The French Socialist president, speaking at FAO’s 40th anniversary celebration, suggested that international cooperation be carried out along “three axes” to avoid further decline in the international economic relations of developing countries.

His proposals included better management of the international monetary system, the full participation of developing countries in multinational trade negotiations, and the development of an overall approach to debt and development, on both the public and private level.

As an example of what he described as “a significant step towards international coordination,” Mitterand cited the joint move to devalue the dollar, taken on September 22 by the ministers of finance of the five major industrial nations.

An unfair situation, in which uncontrolled free market forces made it impossible for developing countries to compete with advanced countries in the sale of raw commodities, lay at the heart of the economic difficulties crippling Third World nations, said Mitterand.

“Rapid growth in the supply of food products in the developed countries has caused increased production in the international market, and has driven prices down,” Mitterand said.

“Can anyone conclude that a completely free market gives poor farmers in developing countries more entry into the world market?” he asked. “No, a total free market will only give profits to the developed countries.”

Earlier on Thursday, FAO delegates heard President Suharto of Indonesia urge rich nations to use their vast resources to aid developing countries rather than waste funds on the arms race that brings only “misery and suffering.”

“The advanced countries have the responsibility and the capacity to give an opportunity to the developing countries to make progress… rather than using the available huge potential and capital for the arms race which drags life and mankind into misery and suffering,” said the Indonesian leader.

He called on wealthy nations to promote “international trade policies which stimulate the growth of the developing countries.”

Suharto gave a detailed explanation of how his nation has gone from what he called the world’s largest importer of rice to one that is self-sufficient in rice.

“What we have achieved is not a miracle. It represents the hard work of a nation,” he said.

The president also prayed FAO for its work in fighting hunger, but warned that developing countries should avoid becoming dependent on aid.

“Food aid must intrinsically constitute a means of the recipient countries to gradually be able to fulfill their own food requirements,” he said.

Suharto pointed out that many countries are destroying food to stabilize prices while people in the Third World nations “tragically perished in abject misery due to famine.”

“It would be an unpardonable sin indeed if together we could not overcome such famine,” he said.

The International Courier
15 November 1985